Surety Bonds are the ones that a person is inquiring about if they need it. It will depend on how long the surety bond takes to get for the individual due to various factors, such as type and size of the bond, underwriting process, and how fast an applicant provides the required information.
The Short Answer
For small, single-license bonds, the application process can complete the same day if all required documents are filed. Larger bonds, or those requiring more underwriting, may take longer time. If multiple bonds suffice or a high-risk bond, the application process may take longer. More details on the application process and timeframes can be found on the website to help you better understand the requirements.
Factors That Affect Bond Processing Time
Type of Surety Bond
There are some bonds that are considered low risk in the sense that claims do not happen often. Very little underwriting is required for those bonds, so they make the process quicker. For example, a $25,000 California finance lender license bond just needs a one-page application and a credit check, so it can be issued on the same day.
Higher risk bonds, such as bid bonds, performance bonds, or payment bonds, require increased documentation. These bonds may require:
- An RFP or details of the contract
- Bond forms
- Contractor questionnaires
- Business and personal financial statements
- Cash confirmations
Usually, the more documents needed, the longer the surety company would take to review them and approve the bond.
Size of Bond
In most cases, higher bond amounts come with higher risks that require further underwriting; so an instant approval may be carried out on a small bond, whereas a large bond may take several days for the financials and risk evaluations.
Multiple Bonds
Multiple bonds would take time as a function of the number of bonds and the aggregate amount of the total bonds.
- Instead of five bonds, if you need 25, it will certainly take longer.
- High aggregate bond amount that is the total value of all bonds combined increases the amount of risk and so more underwriting and time is required in approval.
In-house Underwriting Authority
Some surety bond brokers can actually underwrite and issue bonds themselves before approving it by the surety carrier, which is called in-house authority and speeds up the process tremendously. Well, in-house authority brokers can issue at least tens of bonds instantly while those who need their carriers’ approval may face delays during the process.
The Responsiveness of the Principal
The most effective will speed up receipt of your bond since you are the principal – the entity or person applying for the bond. Your delay in submission of the documents or your response to broker or surety company’s requests will definitely delay the whole process.
Broker and Carrier Workload
The workload earned by a broker and surety carrier affects time of process, too. For example, during a busy time he may spend longer time processing a simple bond.
Receiving Your Bond
Once the bond is approved, it will also have to be executed before submission to the obligee and, therefore, must be sent to you for signature.
- Regular mail delivery would take a longer time.
- Expediting mail services like overnight delivery would speed the process.
Conclusion
Getting a surety bond takes time. The time depends on the bond type, amount, underwriting requirements, and responsiveness. Small and low-risk bonds usually take only a day while big and riskier bonds may stretch even to days. Giving all the information requested as quickly as possible is the fastest way for approval.
